Crude up 4.15 today over 94 fed lowers 1/4 pt, Sorry but trouble looms.

[W2R]

If gas were $10 a gallon, you believe people would stop going to work? Really? They wouldn't, maybe, carpool or take public transportation? The fuel cost is a relatively small part of the cost of car ownership for most people.

I don't know if this is happening elsewhere, but lately the parking lot at my work is sprouting Priuses at at pretty rapid rate, and we probably have a dozen or more van pools. It seems like many/most people who used to drive SUV's from the North Shore now drive a Prius or ride in a van pool. They do not seem especially distressed about either option. The gas mileages that I am hearing about with these Priuses are utterly amazing. I think they are cute (so sue me! ) and I would think of getting one except that I only fill my gas tank every six weeks or so.

Others, like me, live just a mile or two from work. I doubt I would think twice about rising gas prices, though at some point I might be inspired to look for a route by which I could safely walk or bicycle to work.

I doubt anybody would stop coming to work due to rising gas prices. At some point ($1000/gallon? certainly much higher than $10/gallon) most would probably just move closer in and bicycle to work. Sales of bicycles, helmets, and other biking gear would rise. The parish would probably pay to re-stripe the streets in order to allow for more bike lanes. Businesses near work would thrive. Rising gas prices could stimulate the local economy in the long run. Ah, brave new world!

 

[dumpster56]

The media is out to lunch here with the price issues, did you see 60 mins last week? Leslie stall asks the Prez of France about his divorce! after he said weeks ago he would not speak about it in public again!! He walked out! Good for him. The american media circus is a national joke. Americans who live in the colder parts of the country and heat with oil will be paying 40 to 60% more this year to heat their homes. Heating oil is selling in the 3 dollar a gallon range today, that is almost 1.25 more than last year. Not good,the Fed is clueless here, cut the interest rate? Inflation is here, I was at the store yesterday a can of Mushrooms the small can was 1.19 it comes from Indonesia the Krogers label stems and pieces the cheap kind! You would think we would have canned mushrooms grown here in the states!!!This is the kind of stuff that is happening how much energy does it cost to bring a can of mushrooms to north carolina from indonesia? AND WHY WOULD ANY BUYER BUY IT These cans were selling at .69 cents the ones that come from kennet square pa!!

Get a bike people, we are gonna be like the chinese, yea right can you see the fat american on a bike?

Oh yea people will move closer to work, hummm if they cannot sell their house, cannot get rid of the upside down suv loan how are they gonna do those things?

I would love to see the president make a speech where he says thats it america oil is done a new manhattan project new railroads coal alternative energy fuel cells etc and that middle eastern oil is going the way of west texas crude AWAY, ALL USED UP sooner than later. 10 years to be off the stuff. Lets see the price of things then.

 

[W2R]

Get a bike people, we are gonna be like the chinese, yea right can you see the fat american on a bike?

Sure! Most of the people at my work are fat due to cubicle life, and most have joined a gym. The few exceptions seem to be the naturally skinny people. Fat and skinny alike seem to enjoy walking during lunch or breaks and using the stairs. I think many would ride a bike to work if they had a little incentive and a safe bike lane.

Oh yea people will move closer to work, hummm if they cannot sell their house, cannot get rid of the upside down suv loan how are they gonna do those things?

At my work many have already switched from their SUVs to Prius's or other cars with good gas mileage, or take the van pools. I have not heard anyone complaining about their old SUV loans.

After Katrina, there was a migration towards the North Shore (30-50 miles from work, to areas that did not flood), and prices went up there. If migration proceeded in the opposite direction, home prices would go down on the North Shore and up on the South Shore. Trends like this happen from time to time and people just adjust and go on with life because that is what they have to do. They don't quit work unless there is a better opportunity elsewhere. There might be more telecommuting.

 

[UncleHoney]

People are really starting to feel the pinch now. Yesterday I had lunch with an ex-coworker. He drives a big Chevy "dually" pickup about 70 miles round trip to work every day and he heats with oil. He's starting to look for something a little more economical for the daily commute.

Right now he must be using 4 to 5 gallons every day just to ride to work, by himself. That's $12-$15 a day. That's gotta hurt.

 

[brewer12345]

I wish there were a way to take side bets on this forum. I've seen this sort of statement for the past 4 years; so far it has been wrong. IMO it will always be wrong. Alternates will be developed over time, and oil may one day be saved for high value uses such as feedstocks for petrochemicals.

But even nuclear fusion would not make oil obsolete, and fusion does not seem to be on the horizon.

Ha

Agreed. For example, why on earth has the feddle gummint not jump started development on a commercial scale coal to liquids plant? A few billion dollars in subsidies is peanuts for uncle sam, an this is one of teh more promising alternatives for motor fuel.

 

[W2R]

Agreed. For example, why on earth has the feddle gummint not jump started development on a commercial scale coal to liquids plant? A few billion dollars in subsidies is peanuts for uncle sam, an this is one of teh more promising alternatives for motor fuel.

Alternative Energy is a top federal priority right now (but please don't remind me of work! ). Systems to extract wind energy seem to be especially attractive and the wheels are presently turning to put large Alternative Energy systems in place. Regulations are being completed and environmental impact statements are being put together. It will take a few years for results, since the federal government is not noted for their speed in making changes.

Here's one example that is pretty far along, and that you have probably heard of already: Cape Wind - Wikipedia, the free encyclopedia

This is just the beginning and the federal effort extends on many fronts.

 

[DallasGuy]

I know hindsight is 20-20, but wouldn't the US have been better served by spending the money that we're "wasting" in Iraq on development of alternative fuels and technologies? Or taken that money and subsidized the use of solar (or something like that). Our current administration seems to believe in letting the market figure things out on it's own, but in the mean time we're fighting a war in a part of the world that all we honestly care about is whether we can get oil out of it. Why not put a huge amount of our money and energy in the US into attempting to become energy independent?

I just spent a month in Italy and was amazed at all of the smallish cars there. I drive a compact car here in the US that gets about 30mpg at the highest...it seems downright huge compared to the majority of the cars in Italy. I actually feel as though I should be driving something more energy efficient now. I feel no sympathy when I see someone pull up next to me at the gas station with a big SUV to fill up and have to pay an arm and a leg for gas...people actually don't NEED a big SUV. In the long run, it's probably a good thing that oil prices are rising...it will eventually force many people to drive more efficient vehicles. Also, perhaps the car companies that market cars will actually sell a non-hybrid car in the US that gets close to 45-50 mpg. Currently you can only get that kind of mileage by buying a hybrid which are overpriced in my opinion. I guess the market eventually figures things out on it's own...it just takes longer.

 

[JustMeUC]

Administrative Assistant at my office makes about $28,000/year. She lives in an older doublewide Mobile Home 35 miles from Raleigh on land her Grandmother gave her. She drives a 10 year old paid for car that she says gets about 25-28 mpg. For people like that, you better believe that the gas prices will hurt. No way can she afford to live in Raleigh with rent prices in the $600 & up range for apartments and homes starting at $200,000. But if she were to find work closer to home she would be making $15,000/yr full-time. There are a LOT of people out there just like her who are not going to be buying many gifts for Christmas this year.

For those making $50,000 and up or those who live near work gas prices are not going to mean much, for those that are not, well they will cut out other things which is gonna hurt all of us.

 

[MasterBlaster]

Administrative Assistant at my office makes about $28,000/year. She lives in an older doublewide Mobile Home 35 miles from Raleigh on land her Grandmother gave her. She drives a 10 year old paid for car that she says gets about 25-28 mpg. For people like that, you better believe that the gas prices will hurt. No way can she afford to live in Raleigh with rent prices in the $600 & up range for apartments and homes starting at $200,000. But if she were to find work closer to home she would be making $15,000/yr full-time. There are a LOT of people out there just like her who are not going to be buying many gifts for Christmas this year.

For those making $50,000 and up or those who live near work gas prices are not going to mean much, for those that are not, well they will cut out other things which is gonna hurt all of us.

If you have traveled much you just might realize that your friend is better off than most of the worlds population. Many would look at your friend as being "rich"

 

[JustMeUC]

If you have traveled much you just might realize that your friend is better off than most of the worlds population. Many would look at your friend as being "rich"

Actually, I have traveled extensively in 3rd world countries and realize this without any doubt, though I doubt she does.

My point was really that you must look at the oil prices from the point of view from someone like her who is already "struggling" when saying that it is not going to make much difference. To someone like that gas is already probably 10-15% of her take home pay and if it goes up to $5.00/gallon it will be almost unmanageable. There are many more people barely making ends meet than those seriously planning ER.

 

[Moemg]

The gas prices are bad but you can always drive less .What can you do about the home heating cost ? A lot of us live in areas that are warm and don't realize how high oil prices affect our neighbors up north . Their utility bills will go sky high .

 

[W2R]

Administrative Assistant at my office makes about $28,000/year. She lives in an older doublewide Mobile Home 35 miles from Raleigh on land her Grandmother gave her. She drives a 10 year old paid for car that she says gets about 25-28 mpg. For people like that, you better believe that the gas prices will hurt. No way can she afford to live in Raleigh with rent prices in the $600 & up range for apartments and homes starting at $200,000. But if she were to find work closer to home she would be making $15,000/yr full-time. There are a LOT of people out there just like her who are not going to be buying many gifts for Christmas this year.

For those making $50,000 and up or those who live near work gas prices are not going to mean much, for those that are not, well they will cut out other things which is gonna hurt all of us.

I take it that van pools have not yet caught on in your area? Some of our administrative assistants own condos near work, and others own houses further out. In the event of drastically rising gas prices, I can't imagine that Christmas gifts would be axed rather than joining one of the many van pools that already exist going to and from the outlying areas.

 

[JustMeUC]

I take it that van pools have not yet caught on in your area? Some of our administrative assistants own condos near work, and others own houses further out. In the event of drastically rising gas prices, I can't imagine that Christmas gifts would be axed rather than joining one of the many van pools that already exist going to and from the outlying areas.

We do have van pools which I personally checked into for myself I live also about 35 or so miles from the city (though different direction from her or we could carpool) and it was going to be $125/month to join the pool then I would have to keep a second car at the central drop off location to get to my office. The city bus system is not very extensive here in Raleigh. Just not feasible nor would it save much/any money. Raleigh has been fighting about getting light rail here but we are so spread out that it is just not practical.

I don't see how someone on a $28,000 salary could buy a $160,000 condo in Raleigh. Cheapest you could find in a safe area. Plus they would still need transportation. It's a difficult problem with no real easy answers.

As far as heating oil goes I am just thankful I need heat very little down here in the South!

 

[W2R]

I guess people are just a lot more self-reliant down here in New Orleans! Or maybe living in the deep South is a lot easier financially than living up where you are. For some reason, administrative assistants don't expect to live in the best neighborhoods down here. People here claim that they are actually making money from the van pools, not spending it, due to government programs, tax credits, and so on. If they weren't, they'd work out private carpools and pay 1/5 as much that way.

Whether private carpool or van pool, the whole point is for people to get dropped off at their work, not miles away. At least that is what all those that I know have arranged.

 

[JustMeUC]

For some reason, administrative assistants don't expect to live in the best neighborhoods down here.

This girl is now living in a 20 year old doublewide mobile home.... I seriously doubt that she is expecting to live in the lap of luxury. I also doubt that she would make it long in a neighborhood she could afford on her salary. I am talking about someone that probably brings home $1400/month remember. There are not a lot of decent condos sitting around for sale for less than $100,000 which is what I figure would be her upper limit. In fact I would dare say that there are NONE in Raleigh for that price in even the sketchiest of neighborhoods. A 1 bedroom condo in a DECENT not too scary neighborhood starts at around $160,000.

I guess a lot of our perspective probably comes down to the area around us and what we see. Here in Raleigh the housing market is booming, prices going up and "poor" people are being pushed to the edge.

 

[MasterBlaster]

JustMeUC:

Somehow I don't feel that your friend is worthy of a government program funded by "the rich" to move her up the food chain.

 

[JustMeUC]

JustMeUC:

Somehow I don't feel that your friend is worthy of a government program funded by "the rich" to move her up the food chain.

Who the heck said she wanted a government program? My point was that people who are getting stretched by the gas prices are going to be not spending as much in other areas which will end up hurting all of us.

 

[samclem]

Van/car pools: One thing that is a problem in some work environments is the lack of flexibility of these things. "Sorry, I can't work anymore, I have to catch the carpool." That's a problem in many management/exec jobs. Frankly, a guy/gal who can't/won't stick around to work extra time when needed (often without notice) is worth less to the organization and is going to be at a significant competitive disadvantage compared to a more flexible co-worker. It's not true in all workplaces and many of these "crises" could be avoided with better planning--but they happen.

 

[RunningBum]

This girl is now living in a 20 year old doublewide mobile home.... I seriously doubt that she is expecting to live in the lap of luxury. I also doubt that she would make it long in a neighborhood she could afford on her salary. I am talking about someone that probably brings home $1400/month remember. There are not a lot of decent condos sitting around for sale for less than $100,000 which is what I figure would be her upper limit. In fact I would dare say that there are NONE in Raleigh for that price in even the sketchiest of neighborhoods. A 1 bedroom condo in a DECENT not too scary neighborhood starts at around $160,000.

I guess a lot of our perspective probably comes down to the area around us and what we see. Here in Raleigh the housing market is booming, prices going up and "poor" people are being pushed to the edge.

I've been gone from Raleigh/Cary for 7 years so I don't know what's going on with real estate and neighborhoods so much anymore but I don't quite believe this. I put "under 100K" and condo in a real estate search limited to Raleigh and got 101 hits, spread throughout the city. At least 1/4 are in north Raleigh, many off of Millbrook, and I don't remember any of north Raleigh being very dangerous. Likewise another dozen or so in the area in SW Raleigh bounded by 40/440/54 where I lived years ago. Most look to be 2 BR also.

I even got 8 hits in Cary. The joke in Cary was that the biggest crime was people serving the wrong wine with their cheese.

Maybe new condos can't be had for this price, but existing ones certainly can be.

 

[Rocket_J_Squirrel]

Oil is a commodity!

Some of the views expressed in this thread are very interesting, seeming to come from many with a self-view of what’s going on but with very little economic rationale behind their thinking.

Two facts people must keep in mind about rising oil prices is that oil is a commodity and oil is priced in dollars.

What did the Fed do yesterday and about a month ago? Right, lower interest rates! What effect did this have on the US dollar? Right, the value of the dollar went down against the major currencies of the world!

Non-US countries who sell oil to the US are not stupid; they do not give the oil away. As the value of the dollar falls, the price of the commodity must rise to stay in balance with the other currencies the commodity is being traded in.

Anyone noticed what has happened to the value of a dollar since 2002? Right, the dollar’s value had plummeted against other major global currencies. In 2002, the Canadian dollar was worth something like $.64 – yesterday the Loonie was $1.05! The highest value since the 1860’s (during the US Civil War). The dollar’s value loss against the Loonie has taken place in just 5 years! Pretty much the same story for the Euro. If the dollar keeps falling against other currencies - $100 oil will be here before you know it.

The dollar’s value doesn’t account for the entire rise in oil's value, but accounts for a good deal of the rise. The other major factors are that financial firms have gotten in to energy trading, costs for oil exploration, construction, and maintenance have been sky-rocketing, the various governments around the world have been getting an increasing share of the oil value as they raise taxes, and of course usage is up as countries like China and India compete with the US to purchase oil.

For those of you talking about peak oil, read Hubbert's Peak: The Impeding World Oil Shortage by Kenneth S. Deffeyes – you will learn a lot! You also need to remember that the amount of oil available increases with the higher price of oil as more oil becomes economically viable to go after at the higher valuation. There is still a bunch of oil out there; it’s just very expensive to bring the oil in!

Invest wisely and understand your investment! RJS

 

[unclemick]

It's all total crap - got the straight skinny at the doughnut shop this morning - once we shoot the lawyers - we can drill offshore New Jersey where one of the biggest untapped oilfields on the planet lies.

This guy is a retired environmental engineer - must have had some really strange sugar on his doughnut this morning.

heh heh heh - we ignored him and didn't rise to the bait. Pssst - Wellesley anyone. I'm thinking we need some less frivolous threads and something truly important - like will the Pats beat Indy this weekend - thus triggering a phone from my sister who actually thinks the PacNW is a good place to live and the Pats have a good team!

 

[haha]

Some of the views expressed in this thread are very interesting, seeming to come from many with a self-view of what’s going on but with very little economic rationale behind their thinking.

Two facts people must keep in mind about rising oil prices is that oil is a commodity and oil is priced in dollars.

What did the Fed do yesterday and about a month ago? Right, lower interest rates! What effect did this have on the US dollar? Right, the value of the dollar went down against the major currencies of the world!

Non-US countries who sell oil to the US are not stupid; they do not give the oil away. As the value of the dollar falls, the price of the commodity must rise to stay in balance with the other currencies the commodity is being traded in.

Anyone noticed what has happened to the value of a dollar since 2002? Right, the dollar’s value had plummeted against other major global currencies. In 2002, the Canadian dollar was worth something like $.64 – yesterday the Loonie was $1.05! The highest value since the 1860’s (during the US Civil War). The dollar’s value loss against the Loonie has taken place in just 5 years! Pretty much the same story for the Euro. If the dollar keeps falling against other currencies - $100 oil will be here before you know it.

The dollar’s value doesn’t account for the entire rise in oil's value, but accounts for a good deal of the rise. The other major factors are that financial firms have gotten in to energy trading, costs for oil exploration, construction, and maintenance have been sky-rocketing, the various governments around the world have been getting an increasing share of the oil value as they raise taxes, and of course usage is up as countries like China and India compete with the US to purchase oil.

For those of you talking about peak oil, read Hubbert's Peak: The Impeding World Oil Shortage by Kenneth S. Deffeyes – you will learn a lot! You also need to remember that the amount of oil available increases with the higher price of oil as more oil becomes economically viable to go after at the higher valuation. There is still a bunch of oil out there; it’s just very expensive to bring the oil in!

Invest wisely and understand your investment! RJS

Thanks for setting us straight Rocket.

 

[Bestwifeever]

And even if you work from home, can walk or bike to work, have carpools or vans or public transportation, an increase in oil prices affects you because everything you use has some transportation component in its cost and so its price will increase fractionally, I would imagine.

 

[TromboneAl]

$5+/gal is just what we need. This country is a tinder box ready for some real innovation in energy and fuels, and we need a spark from a big jump in gas prices. Sixteen electric car startup companies, for example. No more namby-pamby regulations to improve gas mileage by a few MPG in 15 years.

Bring it on.

 

[Rocket_J_Squirrel]

$5+/gal is just what we need. This country is a tinder box ready for some real innovation in energy and fuels, and we need a spark from a big jump in gas prices. Sixteen electric car startup companies, for example. No more namby-pamby regulations to improve gas mileage by a few MPG in 15 years.

Bring it on.

Innovation in energy and fuels? Anyone see the recent article on PRNewswire about BP trying to set up a $500 million energy bioscience institute at UC-Berkley? Even when the big oil companies try to work in alternative engery areas the environmental wackos says it's bad or not enough! If the issue of energy efficiency were ever solved, the wacko corps would be out of work! Got to go, I have to go back to look for the keys to my H1. - RJS

Consumer Advocates Insist UC Regents Review $500 Million 'UC-BP' Deal; Demand Proposed Contract Terms Be Made Public=